A housing reality check

Summary

Marketplace Podcast Summary: "A Housing Reality Check" Release Date: February 26, 2025

In the February 26, 2025 episode of Marketplace, host Kai Ryssdal delves into the intertwined dynamics of consumer confidence, inflation expectations, and the housing market, providing listeners with a comprehensive analysis of the current economic landscape. The episode features insightful discussions with economists, real estate experts, and industry leaders, offering a multifaceted view of the challenges and trends shaping the economy.

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1. Inflation Concerns and Tariffs

Consumer Confidence and Inflation Expectations

Kai Ryssdal opens the episode by highlighting persistent concerns about inflation despite five years since the pandemic's onset. Referencing the latest Consumer Confidence Index from the Conference Board, Ryssdal notes a significant decline in the Consumer Expectations Index, which measures public sentiment regarding income, business conditions, and the job market. This decline underscores growing anxiety about future economic stability.

Ryssdal [01:07]: "Consumers also believe inflation's going to get worse in the next 12 months."

Impact of Tariffs on Inflation Psychology

Ryssdal explores the potential psychological impact of newly proposed tariffs on Mexico, Canada, Panama, Denmark, and Greenland. Economists express concern that the anticipation of higher tariffs could exacerbate inflation fears among consumers.

Alan Detmeister [02:30]: "Tariffs are coming. They're going to push up inflation a lot."

Omar Sharif, president of Inflation Insights, discusses how certain Treasury bonds are beginning to price in higher inflation, which, in theory, could lead to self-fulfilling prophecies where inflation expectations drive actual price increases. However, Sharif remains cautious, suggesting that current inflation expectations may not yet be influencing consumer behavior in this manner.

Omar Sharif [03:08]: "It doesn't appear to be happening... Whether this theory is reality is debatable."

David Miracle, Chief US Economist at Goldman Sachs, warns that inflation expectations anchored in prolonged actual inflation can become particularly dangerous, as they become entrenched in daily experiences and behaviors.

David Miracle [04:00]: "The most dangerous kinds of inflation expectations are the ones created by living with actual inflation."

Political Divide on Inflation Concerns

Ryssdal points out the partisan divide in concerns over inflation, with Democrats and Independents expressing more worry compared to Republicans.

Ryssdal [02:30]: "In surveys Republicans are less or not concerned about inflation, Democrats much more concerned. But the numbers aren't totally partisan. Independents are also worried."

Conclusion on Tariffs and Inflation

While the tariffs have yet to directly impact prices for most goods, the lingering discussions and political maneuvers surrounding them continue to affect consumer sentiment. Ryssdal emphasizes the potential long-term psychological effects and the real possibility of tariffs leading to tangible price increases.

Ryssdal [04:07]: "The tariffs haven't hit prices for most goods yet, so Merkel is less worried about psychology for now. But our brains may be soaking in tariff inflation talk for a while again."

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2. Housing Market Reality Check

National and Regional Home Price Trends

Moving to the housing sector, Sabri Beneshore reports on the Case Shiller Home Price Index, which showed a national increase of 3.9% in December. While this growth rate is significant, it is markedly more manageable compared to the nearly 19% year-over-year rise three years prior.

Sam Chandin [05:49]: "Compared to that, 3.9% is more manageable."

However, even this moderation masks underlying regional disparities. Brian Luke from S&P Dow Jones highlights that the Northeast is currently experiencing the fastest home price increases, reversing earlier trends seen during the pandemic.

Brian Luke [06:40]: "The Northeast has long been expensive with consistently high demand."

Factors Influencing Housing Prices

Several factors contribute to the sustained high home prices:

• New Construction: Increased building activity has helped balance supply and demand, slowing price growth in some Sunbelt markets.

  Sam Chandin [06:00]: "There's been a lot of new construction... that has helped back balance supply and demand and slow price growth."

• Climate Change and Insurance Costs: Rising concerns about climate change are influencing homebuyers, especially regarding increasing insurance premiums in vulnerable areas like Florida.

  Sam Chandin [06:20]: "Home buyers... may be thinking also about the impact of climate change... about rising insurance costs."

• Regulatory and Land Constraints: In the Northeast, limited developable land and stringent regulations hinder new construction, perpetuating high prices.

  Ali Wolf [06:58]: "There's not much new inventory, there's not much developable land."

Renovation Market and Home Improvement Trends

The housing reality check extends to the renovation sector. Home Depot’s recent quarterly earnings revealed a 1% sales growth, signaling a potential normalization following the pandemic-induced boom.

Sam Chandin [07:47]: "A lot of money moved out of stocks, so equity indexes generally down... we're going to do a little homes segment here."

Retail consultant Greg Portel interprets this growth as normalization rather than a spike, suggesting that consumers now have a clearer sense of certainty in their home improvement plans.

Greg Portel [08:24]: "It is important not to confuse normalization with all of a sudden an uptick."

Nick Spector, owner of Allaire Homes in Houston, observes an increase in smaller-scale renovations as homeowners prioritize maintaining their existing properties over large-scale remodels, influenced by high prices and mortgage rates slowing nationwide home sales.

Nick Spector [09:11]: "We're seeing a lot of people... interested in moving forward with projects..."

Michael Baker from DA Davids echoes this sentiment, predicting that the slow housing market will likely keep growth in home renovations subdued.

Michael Baker [09:34]: "A slow housing market will likely keep growth in home renovations low."

Conclusion on the Housing Market

Overall, the housing market appears resilient, with regional variations and structural factors like construction costs and labor influencing ongoing trends. While prices continue to rise, especially in the Northeast, efforts to increase supply and mitigate environmental concerns are shaping the future landscape.

Ryssdal [09:53]: "It doesn't seem to be getting worse and in fact bouncing along the bottom and maybe even getting a little bit better."

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3. The Blurb Economy: Challenges in Publishing

In a thought-provoking segment, Constance Grady from Vox joins Sabri Beneshore to discuss the controversial blurb economy—the practice of soliciting testimonials from established authors to promote new books.

The Mechanics and Controversy of Blurbs

Blurbs serve as endorsements on book covers, typically from well-known authors, aiming to attract readers. However, the process has become increasingly burdensome for successful authors who receive numerous requests daily.

Constance Grady [12:43]: "Blurbs are those little testimonials that you see on a book's cover... making it have a big splashy entree when it comes out."

Many authors express frustration over the time-consuming nature of providing genuine endorsements, often having to decline requests or offer superficial praise without thoroughly reading the books.

Constance Grady [14:27]: "A lot of authors will admit, I don't read everything I blurb. I maybe read, you know, the first and last chapter and kind of hope for the best from there."

Impact on Authors and Publishers

The overwhelming demand for blurbs creates an emotional and logistical challenge for authors, who prefer to focus their efforts on writing rather than promotional activities. Publishers, on the other hand, grapple with allocating limited marketing resources, often reserving substantial support for anticipated bestsellers while neglecting other titles.

Constance Grady [15:21]: "Blurbs are one of those things that if you're an author, it's one of those things that you can kind of use like it's a magic shield... but I will live without it."

Reader Engagement with Blurbs

Constance Grady emphasizes that many readers, including herself, find blurbs more useful for professional evaluation rather than personal decision-making. She questions the actual impact of blurbs on book sales, suggesting that their effectiveness might be overstated.

Constance Grady [13:04]: "I look at the back cover of a book, I don't read the blurbs... it has no effect on whether or not I buy the book."

Future of the Blurb Economy

While some advocate for eliminating blurbs to reduce the burden on authors and streamline the publishing process, others believe they remain a valuable marketing tool. Grady posits that as long as blurbs can provide an advantage in competitive markets, authors will continue to seek them despite the challenges.

Constance Grady [15:43]: "Blurbs can be kind of an equalizer... I think a lot of authors are going to want to keep trying to get blurbs and hope that they will make a difference."

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4. Energy Tariffs and Their Impact on New England

Backed by ongoing discussions about tariffs, the episode shifts focus to the energy sector, particularly the relationship between New England utilities and Hydro Quebec.

Tariffs on Canadian Energy

President Trump's administration has hinted at imposing tariffs on various energy imports, including a 10% tax on energy from Canada. This move threatens to increase energy costs for regions like New England and New York, which rely heavily on Canadian gas, oil, and electricity.

Ryssdal [27:54]: "A 10% tariff on Canadian energy will mean a direct rate impact for our customers."

Hydro Quebec's Role as an Energy Buffer

Hydro Quebec, leveraging its extensive hydroelectric resources, serves as a crucial energy supplier and buffer for New England. Mark Montalvo from Daymark Energy Advisors explains that Hydro Quebec's capacity acts as a "big battery," storing excess energy from renewable sources like solar and wind to stabilize the grid.

Pierre Olivier Pinot [21:40]: "Quebec can basically store power behind its dams for whenever New England needs it."

Infrastructure Developments

New transmission lines connecting Hydro Quebec to major grids in New England and New York are nearing completion, enhancing the region's ability to import and manage energy more efficiently. These connections not only facilitate energy imports but also allow for energy exports during surplus periods.

Serge Abergel [20:49]: "Each of them will bring enough energy to supply a million homes... They can send power north."

Challenges and Mitigation Efforts

Neil Lunderville of Vermont Gas Systems discusses the direct impact of potential tariffs on consumers, emphasizing that increased costs would be passed on to customers. While efforts to mitigate these effects are underway, uncertainty remains due to unclear tariff policies.

Neil Lunderville [22:21]: "A 10% tariff on Canadian energy will mean a direct rate impact for our customers."

Conclusion on Energy Tariffs

The looming tariffs present a significant risk to energy affordability and stability in New England. The region's dependence on Canadian energy underscores the importance of strategic infrastructure and policies to safeguard against potential economic disruptions.

Ryssdal [26:30]: "Tariffs... the president signed an order today directing the Commerce Department to investigate whether copper tariffs might be warranted."

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5. My Economy: Entrepreneurial Challenges in Mushroom Farming

In a personal and entrepreneurial spotlight, Howard Burke, president and co-founder of Ellijay Mushrooms in Ellijay, Georgia, shares his journey in the mushroom farming industry.

Starting the Business

Burke recounts his collegiate beginnings, where his interest in mushrooms grew from healthy eating habits to cultivating mushroom logs. This passion evolved into a full-fledged business as he partnered with others to scale operations.

Howard Burke [23:55]: "It wasn't until college that I really took it seriously in mushrooms... we created Ellijay Mushrooms."

Navigating Business Challenges

Early challenges included pricing complexities and unexpected costs such as delivery and labor fees, which initially led to financial losses. However, strategic adjustments and careful financial planning eventually led to profitability.

Howard Burke [25:00]: "This year we just hit profitability. We just got it over the line."

Scaling and Funding Needs

As the business grows, Burke faces the need to expand by building additional greenhouses. Securing funding through grants, such as the Value Add Producer grant, is crucial. Without these funds, the company may need to seek alternative financing, introducing further risks.

Howard Burke [25:40]: "If we don't have those USDA funds and loans, we're just going to move forward with it and know that we're going to make it happen."

Commitment to the Community

Located in a rural area, Burke emphasizes the importance of providing stable, healthy wages to local employees, fostering a supportive community environment.

Howard Burke [26:10]: "We wanted to make sure that the employees that lived here, we could give them a living, healthy wage that they could stay here with their families."

Conclusion on Entrepreneurial Resilience

Burke's narrative highlights the resilience and adaptability required in the agricultural sector, illustrating how small businesses navigate financial uncertainties and scale sustainably while contributing to their local economies.

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6. Market Movements and Economic Indicators

Throughout the episode, Sabri Beneshore provides updates on stock market performances and economic indicators:

• Dow Industrials: Up 159 points (+0.43%)
• NASDAQ: Down 260 points (-1.3%)
• S&P 500: Down 28 points (-0.5%)
• Notable Movements: Zoom plunges 8.5% following slower-than-expected revenue growth; Home Depot surges 2.8%; Lowe’s gains approximately 2.2%; Joann’s plans to close all 800 stores due to inability to find a buyer.

Bond Markets: Bond prices are up, leading to a decrease in yields on the 10-year Treasury note by 4.3 points.

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7. Final Remarks and Upcoming Developments

In closing, Kai Ryssdal touches upon ongoing tariff investigations and the potential introduction of copper tariffs under Section 232 of the Trade Expansion Act of 1962. The episode underscores the significance of understanding these economic policies and their broader implications on national security and market dynamics.

Ryssdal [27:54]: "Section 232 of the Trade Expansion Act of 1962... the president signed an order today directing the Commerce Department to investigate whether copper tariffs might be warranted."

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Conclusion

This episode of Marketplace offers a nuanced examination of current economic challenges, particularly focusing on inflation expectations influenced by tariff discussions and the multifaceted nature of the housing market. Through expert insights and real-world examples, listeners gain a deeper understanding of how these elements interact and shape the broader economic environment. The inclusion of personal entrepreneurial stories, like Howard Burke's, adds a relatable dimension to the complex economic narratives presented.

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For more insights and detailed analyses, consider tuning into future episodes of Marketplace.

Transcript

[Kai Rysdal]

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[Constance Grady]

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[Sabri Beneshore]

One word, three syllables. Something you are probably sick and tired of hearing about From American Public Media. This is Marketplace in Los Angeles. I'm Kai Rysdal. It is Tuesday today, the 25th of February. Good as always to have you along, everybody. Had you been thinking somehow that as we sit here five years after the onset of the pandemic, with supply chains mostly back to normal consumer demand in line with what it was in the before times and the Federal Reserve having cranked up interest rates, if you had been thinking that maybe you could be done with hearing stories about inflation, well, then this program today maybe isn't for you because let me explain. We got the February Consumer Confidence Index from the Conference Board today and it wasn't great. The Consumer Expectations Index, what we all think about income and business conditions and the job market dropped significantly also, and to the point of what I was saying, consumers also believe inflation's going to get worse in the next 12 months. And and those inflation expectations can be a dangerous thing, as Marketplace's Sabri Benishore reports, to get us going.

[Kai Rysdal]

Consumers are starting to get a little freaked out by all the talk about tariffs, tariffs on Mexico, on tariffs on Canada, reciprocal tariffs across the board. Alan Detmeister is an economist at ubs. There were even tariffs floated on, you know, Panama and Denmark and Greenland. And all this is a concern because it could get into the inflation psychology. And people are hearing this and are like, oh, tariffs are coming. They're going to push up inflation a lot. In surveys Republicans are less or not concerned about inflation, Democrats much more concerned. But the numbers aren't totally partisan. Independents are also worried.

[Howard Burke]

You can see it in the market as well.

[Kai Rysdal]

Omar Sharif is president of Inflation Insights. He says certain treasury bonds have started to price in higher inflation and expectations can be dangerous, at least in theory, because they can become a self fulfilling prophecy.

[Howard Burke]

If you think prices are going to rise, it might drive you to sort of make those purchases today instead of waiting for those higher prices, which causes a jump in demand which itself can lead to higher prices.

[Kai Rysdal]

That does not appear to be happening, Sharif says, and it's debatable whether this theory is reality. Right now I would be a lot more worried about inflation expectations rising up on the back of high actual inflation. David Miracle is chief US Economist at Goldman Sachs. He says the most dangerous kinds of inflation expectations are the ones created by living with actual inflation.

[Sabri Beneshore]

If inflation is high enough for long.

[Kai Rysdal]

Enough and it becomes part of your.

[Sabri Beneshore]

Daily experience that you get used to.

[Kai Rysdal]

It and it becomes self perpetuating. The tariffs haven't hit prices for most goods yet, so Merkel is less worried about psychology for now. But our brains may be soaking in tariff inflation talk for a while again. Omer Sharif, quite honestly, this could very.

[Howard Burke]

Much linger into the fall because you will get these constant updates on what's happening with these investigations and individual nations.

[Kai Rysdal]

And of course, psychology aside, the potential for tariffs to raise actual prices is very real. In New York, I'm Sabri Ben ashore for Marketplace Real.

[Sabri Beneshore]

Indeed. Wall street today the math kind of goes like this. A lot of money moved out of stocks, so equity indexes generally down. A lot of that money went into bonds, which means bond prices went up and that means bond yields went which way now? Anyone? Anyone down? We'll have the details when we do the numbers. We're going to do a little homes segment here, a little real estate first, the all important update that we got from the benchmark Case Shiller Home price index, which was out this morning nationally up 3.9% in December. A lot. Yes, but if I might paraphrase Alan Greenspan, there is some regional froth in the American real estate market marketplace. Samantha Fields has that one.

[Samantha Fields]

This time three years ago, home prices had risen almost 19% year over year. Compared to that, Sam Chandin at NYU's Stern School of Business says 3.9% is more manageable.

[Howard Burke]

But even these relatively small increases are on the top of generationally high levels.

[Samantha Fields]

Of prices in some Sunbelt markets that saw big spikes early in the pandemic. There's been a lot of new construction and Shandon says that has helped back balance supply and demand and slow price growth. In addition, there's anecdotal evidence that some.

[Howard Burke]

Home buyers in Florida and elsewhere may be thinking also about the impact of.

[Samantha Fields]

Climate change, not necessarily worrying about the next major hurricane, he says, but about rising insurance costs.

[Kai Rysdal]

Part of the competitive advantage for some.

[Howard Burke]

Of these markets historically has been that they're much more affordable than the Northeast, than California.

[Samantha Fields]

But as home prices and insurance costs have gone up in Florida, he says, some of that affordability advantage has disappeared. Brian Luke at S&P Dow Jones says home prices are now rising fastest in the Northeast, a switch from early in the pandemic.

[Howard Burke]

Less volatility in those markets, more of a slow plodding upward.

[Samantha Fields]

The Northeast has long been expensive with consistently high demand. Ali Wolf at Zonda says one reason prices keep rising there is there's not much new inventory, there's not much developable land.

[Constance Grady]

It's expensive, there's a lot of regulation.

[Sabri Beneshore]

And so you're not finding that homebuilders.

[Constance Grady]

Can come into the market, increase supply and help with home price appreciation.

[Samantha Fields]

And nationally, Sam Chandin at NYU says there are other structural factors keeping prices high.

[Howard Burke]

The cost of construction labor of softwood lumber, the potential for disputes with our trading partners to inflate the cost of some of the materials that we use in home building.

[Samantha Fields]

These are all features of the housing market that he says aren't going away anytime soon. I'm Samantha Fields for Marketplace.

[Sabri Beneshore]

So let's say you've been able to buy a house and you want to do some work on it. Where are you going to go? One of those big home supply stores? Probably Home Depot for our purposes today, which last quarter posted gains in same store sales for the first time in two years. So we learned in their earnings report this morning. Hd, as the stock ticker has it, is a bellwether for the home renovation and construction business, which like the housing market has been chilled by inflation and interest rates that upswing in sales I mentioned. Well, they did beat expectations, but the outlook is not all positive. As Marketplace's Megan McCarty Carino reports, the.

[Samantha Fields]

Renovation market has been on a roller coaster since the pandemic. From stay at home spending sprees to high interest rate retrenchment. Home Depot sales grew by about 1% last quarter, which seems to show things are normalizing, says Greg Portel, a retail consultant with Carney.

[Howard Burke]

I think it is important not to confuse normalization with all of a sudden an uptick normalization just allows consumers to have some certainty.

[Samantha Fields]

Nick Spector, the owner of Allaire Homes in Houston, has noticed a change in his customers as the shock of inflation and higher interest rates has receded.

[Howard Burke]

We're seeing a lot of people, you know, interested in moving forward with projects that they've been thinking about for months or even years in a lot of cases.

[Samantha Fields]

Generally, there's been an uptick in smaller scale renovations. Specter says many homeowners decided to stay put instead of looking for a new house. High prices and mortgage rates have slowed down home sales nationwide, which puts a dent in large scale remodels.

[Sabri Beneshore]

When somebody moves into a new home.

[Howard Burke]

There'S typically something that they want to do, whether it's we need to blow out these walls and do some major changes.

[Samantha Fields]

A slow housing market will likely keep growth in home renovations low, says Michael Baker, managing director at DA Davids.

[Kai Rysdal]

I don't think we're out of the.

[Howard Burke]

Woods yet as it relates to the housing market, but it doesn't seem to be getting worse and in fact bouncing along the bottom and maybe even getting a little bit better, he says.

[Samantha Fields]

Even if the Fed doesn't cut interest rates as quickly as once hoped, rates are unlikely to go up anytime soon. Though the new administration has introduced some uncertainties, says Carney's Greg Portel.

[Howard Burke]

The challenge for consumers is going to.

[Kai Rysdal]

Be how do you interpret the headlines.

[Howard Burke]

On things like tariffs, on things like trade, on things like immigration?

[Samantha Fields]

If costs for construction, labor and raw materials are unpredictable, normalization gets a whole lot harder. I'm Megan McCarty Carino for Marketplace.

[Sabri Beneshore]

You know, when you go to an actual bookstore, this happens on Amazon, too. Those quotes on the back cover or if you scroll down on a book page on Amazon, those blurbs that say something nice about the pages within quotes like revelatory or I couldn't put it down, attributed to various celebrities and big names. Well, that whole book blurb business is getting some attention. Constance Grady wrote about it for a Vox the other day. Constance, welcome to the program.

[Constance Grady]

Thanks so much for having me.

[Sabri Beneshore]

For those unfamiliar with the blurb economy and first of all, there is a blurb economy, right? How does it work? Where do these things come from?

[Constance Grady]

Yeah, absolutely. So blurbs are those little testimonials that you see on a book's cover, usually from another author saying, you know, luminous masterpiece, the best I've read in a while. Those little testimonials are at the middle of a big controversy right now.

[Sabri Beneshore]

Well, discuss what kind of controversy.

[Constance Grady]

Yeah. So the way blurbs work is that some combination of an author, an editor, a publicist will reach out while the book is getting copy edit, kind of making its way down the production line to try to get some blurbs from famous authors, make it have a big splashy entree when it comes out. And what that means is if you're a successful author, you get tons and tons of requests for blurbs every single day. Most authors want to pay it forward. They've received good blurbs when they were starting out, they want to help out. But this is an enormous amount of blurbs that you're being asked to write. And on the end of the author who's trying to get their book published, it's a lot of famous people to try to reach out to and most likely hear a no from. So there's been a bunch of authors and publishers lately saying, hey, this is hugely time consuming. It's an incredibly emotional process. What would happen if we stopped doing all this?

[Sabri Beneshore]

Yeah, well, wait, so. So yes, what would happen? I don't know that there's a single. That's probably not true. There are probably readers who flip. I personally, as a reader, I look at the back cover of a book, I don't read the blurbs. I look to see who did the blurbing, and I go, huh, interesting. But it has no effect on whether or not I buy the book. So do you know whether. Sorry, I'm a little agitated about this. Do you know whether readers actually use these things?

[Constance Grady]

So I have never seen any studies showing that readers care about these things or anything like that. I know that before I became a book critic and started having to read professionally, I found blurbs a little annoying. I was kind of like, I just want to know what the book's about. Why are you using up this real estate? I think blurbs are really handy for people like me now who have to read professionally because there are so many books coming out every year that you simply just don't have time to carefully evaluate each book before you decide how much attention you're going to give it. We are basically the end audience of these blurbs. They exist for us to figure out what to do.

[Sabri Beneshore]

So authors are annoyed by it. Authors who write the books, authors who are asked to be blurbing are annoyed by it. Publishers are annoyed by it. But you need them. Is that where we are?

[Constance Grady]

I mean, I would make do without them. I don't want to. As a reader, I would certainly much rather that authors spend their time writing good books than having to deal with this whole Sort of emotional labyrinth of reaching out and making requests and saying no and read and reading books that you probably aren't that interested in. And scraping together a few lines like that's not really serving anyone, so. Except me, but I will live without it.

[Sabri Beneshore]

Fair enough. Yeah, you'll pay that price. There's no requirement that people actually have read the book right when they blurb, basically.

[Constance Grady]

No. It's kind of an honor system situation. And a lot of authors will admit, I don't read everything I blurb. I maybe read, you know, the first and last chapter and kind of hope for the best from there.

[Sabri Beneshore]

Totally. So what happens, do you think? Do blurbs eventually go the way of the dodo or what?

[Constance Grady]

Well, the main thing that blurbs do for the authors who do want them to stick around is blurbs can be kind of an equalizer. The way publishing is set up right now, most of the resources in marketing and publicity end up getting saved for just a few books who publishers hope will do really, really well. And the rest of the books kind of have to scrounge for what's left. And blurbs are one of the things that if you're an author, it's one of those things that you can kind of use like it's a magic shield and be like, I can't control anything else about my book's debut, but I can control this. And so I think for that reason a lot of authors are going to want to keep trying to get blurbs and hope that they will make a difference.

[Sabri Beneshore]

Fair enough. Constance Grady at Vox. Constance, thanks so much for your time. I appreciate it.

[Constance Grady]

Thank you.

[Howard Burke]

Coming up, cut down a tree, inoculate it and then you could grow mushrooms in your backyard.

[Sabri Beneshore]

Boom, you're in business. But first, let's do the numbers. Dow Industrials up 159 today. Four 10% 43,621. The NASDAQ went the other way, down 260 points. One and a third percent. 19,026. There the S&P 500 off 28 points a half percent. 59 and 55. Zoom plunged 8.5% day after projecting slower than expected revenue growth. Microsoft down one and a half percent. Home Depot surged 2.8% today. Lowe's gained about two and two, 10%. Fabric and crafts supply chain Joanne's says it's going to close all of its 800 odd stores. It couldn't find a buyer to keep them open. Company had about 19,000 employees, most of them part time workers. Want to file for Chapter 11 protection. Back in January. Bond prices, as I mentioned, up the Yield on the 10 year T note down 4.3. You're listening to Marketplace.

[Kai Rysdal]

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[Sabri Beneshore]

This economy can be complicated. That's why the Marketplace newsletter makes understanding it all simple. Get smart takes on the week's biggest stories delivered to your inbox every Friday. No jargon, no hype, just economics you can use. Sign up [e-mail] subscribe this is Marketplace. I'm Kai Rysdal with the caveat that actual details of the tariffs that President Trump has been promising are scant. One thing he did roll out and then delayed earlier this month was a 10% tax on energy coming from Canada. That is obviously going to make energy more expensive for some, including people throughout New England and New York, because some of their gas, oil and electricity does come from north of the border. And on the electricity front in particular, it's interesting to note that utilities and public officials have spent years working to bring more power down from the north. As Marketplace's Henry Epp reports, in the.

[Kai Rysdal]

Dimly lit control room of Vermont Electric Co Op in the town of Johnson, six monitors display a diagram of the small utilities system block. Blue, orange and white lines crisscross the display's black background. They represent the power lines that deliver electricity to 40,000 customers. Manager Isaac Gillen points to one of the monitors, so this has pretty much.

[Howard Burke]

All the high level switches and breakers.

[Kai Rysdal]

And stuff that we can control.

[Howard Burke]

You can see at the top we.

[Kai Rysdal]

Have a Hydro Quebec tie there, meaning a power connection to the grid of Hydro Quebec, the utility on the Other side of the Canadian border. Gillen's pointing to a connection in the town of Highgate, Vermont, which sends power to the whole New England grid. But there are others on the US side of the border in Derby, Norton and Canaan. Back in the day, when we actually.

[Howard Burke]

Used to have to go out and read meters physically, if you're up in.

[Kai Rysdal]

That Derby area, there's times where if.

[Constance Grady]

You'Re not paying attention, you just.

[Howard Burke]

You could slip right into Canada.

[Kai Rysdal]

Another display shows the total amount of power Vermont Electric Co Op is getting from Canada, says CEO Rebecca Towne.

[Howard Burke]

Right now, it's almost 19 megawatts coming.

[Constance Grady]

Through, flowing through our ties to Hydro Quebec right now.

[Kai Rysdal]

That was about 40% of the utility's total needs at that moment. Pretty average, Towne says. According to Hydro Quebec, it supplied 14% of New England's electricity in a particularly cold January. Back in the 1980s, utilities in the region built two major transmission lines to bring that power down from Canada. Mark Montalvo is CEO of Daymark Energy Advisors, a consultant group based in Worcester, Massachusetts.

[Howard Burke]

You know, we were coming out of an energy crisis, right? There was a lot of concern about diversification of fuel supply. Quebec had a very rich water resource.

[Kai Rysdal]

Meaning lots of hydroelectric dams in the north of the province, which for years have produced surplus, cheap power. For the last decade or so, New England and New York have been trying to get more of it. After many delays, two new connections to the Hydro Quebec grid are set to be completed by early next year, says the UTIL utility's Serge Abergel.

[Sabri Beneshore]

Each of them will bring enough energy.

[Howard Burke]

To supply a million homes, one for essentially New England and Massachusetts, and the.

[Kai Rysdal]

Other one for New York City. The lines will also be able to send power north, says Pierre Olivier Pinot, a professor at the business school HEC Montreal. So as New England and New York add more solar and wind, which can also produce surplus power at times, Quebec.

[Howard Burke]

Can basically import electricity, keep the water in the dams, and then that saved.

[Sabri Beneshore]

Water can be used later on to.

[Kai Rysdal]

Generate power when solar and wind aren't. In other words, Quebec can basically store power behind its dams for whenever New England needs it.

[Sabri Beneshore]

The Northeast states shouldn't see Quebec as a net exporter of electricity, but as a big battery to help balance their own market.

[Howard Burke]

And that big battery is already built.

[Kai Rysdal]

Tariffs could make fossil fuels in the region more expensive, too. Right now, fuel oil for homes, gasoline and aviation fuel refined in New Brunswick, and some natural gas all across the border. Vermont gas takes nearly all of its physical gas supply from a connection at.

[Howard Burke]

The Canadian border, Phillipsburg, Quebec.

[Kai Rysdal]

Neil Lunderville is head of Vermont Gas Systems, which serves 56,000 customers in the northern part of the state, including full disclosure me. He says there's no doubt about who would foot the bill for natural gas tariffs. We pass the cost of gas directly to our customers, a 10% tariff on Canadian energy will mean a direct rate impact for our customers. In the meantime, he's been looking at ways to mitigate that impact, but he's not particularly helpful. In Burlington, Vermont, I'm Henry Epp for Marketplace.

[Sabri Beneshore]

Tariff policy is so far unclear, as Henry was just telling us. Also not entirely transparent is what's happening with various federal programs, most specifically the funding of those programs. Last we heard, which was last week, the Department of Agriculture is still planning to release about $20 million in grants money that'll go to individual farmers. That is out of a total, by the way, of nearly 20 billion over 10 years. That was in the Inflation Reduction Act. And as you might imagine, given all of that, farmers are a bit anxious. Here's today's installment of our series, My Economy.

[Howard Burke]

My name is Howard Burke. I'm the president and co founder of our amazing mushroom company, Ella J Mushrooms. We're in Ellijay, Georgia, where we grow shiitake oyster, golden oysters, lion's mane, and we're growing about 5,000 plus pounds a week. It wasn't until college that I really took it seriously in mushrooms. I was eating healthy during that time and I started to do mushroom logs. And that's where you would cut down a tree, inoculate it, and then you could grow mushrooms in your backyard. I would start with about five to 10 of them, and then over the years, I ended up with thousands of them. And then I found out that there was actually an audience for these. Around 2017, 2018, my new business partners found me and we created Ellijay Mushrooms. And that's kind of how we just started to grind and do it. Pricing, not knowing the business, that has been a challenge. Each place is different in value. So there's a retail price, there's a wholesale price, and they're all over the place. And one of the things that was a challenge was like, oh, you have to add in a delivery fee or there's a lumper fee, meaning that if you deliver to XYZ Warehouse, they're going to charge you 50 to $100 to unload it. So at the beginning on some of our accounts, we were losing money because I didn't know that you had to add into those fees. This year we just hit profitability. We just got it over the line. But now since we have to build three more greenhouses, it will go back down to that valley. We're just trying to find funding for it. Currently we are working with a grant writer for the Value Add Producer grant which just got released. And if that's totally off the table, that means we have to go a whole other route. It means that we have to put up more equity, could be more debt. There are more challenges with, I'd say overall more risk. If we don't have those USDA funds and loans, we're just going to move forward with it and know that we're going to make it happen. Up here in Ellijay, we're pretty rural and we wanted to make sure that the employees that lived here, we could give them a living, healthy wage that they could stay here with their families. It's very rewarding.

[Sabri Beneshore]

Howard Burke, president and co founder of Ellaj Mushrooms in LJ Georgia no matter where you are, no matter what you do, we cannot do this series without you. So let us know what's going on, would you? Marketplace.org myeconomy his final note on the way out today, we started with a word. All y'all are sick and tired of hearing inflation. We are going to end with another one. I apologize in advance. Tariffs. We direct your attention now to Section 232 of the Trade Expansion act of 1962, which among other things gives the President virtually unfettered authority to impose tariffs on the grounds of national security. The many times mentioned steel and aluminum tariffs are Section 232 tariffs. And the president signed an order today directing the Commerce Department to investigate whether copper tariffs might be warranted. 25% steel, 25% aluminum supposed to hit in March. As you know, no indication of when or how big tariffs might be on copper. Our Digital and on Demand team includes Kerry Barber, Jordan Manji, Dylan Mient, Janet Wynn, Olga Oxman, Ellen Rollfus, Virginia K. Smith and Tony Wagner. Francesca Levy is the executive director of Digital and On Demand and I'm Kai Rysdal. We will see you tomorrow, everybody. This is apm.

[Kai Rysdal]

Colon cancer is considered one of the most preventable but least prevented cancers. That's why screening for colon cancer is critical. Sometimes people want to avoid the drama of screening with a colonoscopy. You know, the prep, the downtime, all of it. Thankfully, there's the Cologuard test, a non invasive screening option for adults 45 and older. @ average risk that is delivered right to your door. Early detection is critical when caught early. Colon cancer is survivable in 90% of the cases with the Cologuard test. The process is simple. The test is delivered to your door. You send the sample back to the lab and get results within two weeks. The best part? The Cologuard test is covered by most insurance plans. The Cologuard test is intended to screen adults 45 and older at average risk for colorectal cancer. Ask your healthcare provider about screening with cologuard. Cologuard is available by prescription only. Visit cologuard.com to learn more.